Japan's crude steel production to remain unchanged for FY'24 - JISF

Japan's crude steel production is expected to remain unchanged for FY'24 compared to FY'23, as per the Japan Iron and Steel Federation (JISF). JISF released a forecast for FY'24 recently, which, predicts that crude steel production is expected to be below the previous year's level, this would mark the third consecutive year that output falls below 90 million tonnes. Both domestic and export demand are anticipated to remain at the same level as FY'23.

Risk factors

Main factors that can result in the decline of steel demand:

• Russia-Ukraine war and the Middle East tensions trigger high prices of natural resources.
  
  
• Chinese economy's development.
  
  
• Recent changes in monetary policy, both in Japan and internationally, were discussed, with emphasis placed on the ongoing weakness in demand across both regions.
  
  

Domestic demand

While government measures to build national resilience will offer some support to the civil engineering sector. However, steel demand faces a downward trend due to rising costs of raw materials and labour shortage.
Moreover, fewer people are buying houses due to high prices, leading to a drop in new construction starts. While, labour shortages continue to affect construction in the non-residential sector, due to which, the demand for steel products is declined.

Manufacturing industry

Ship-building faces stagnant growth despite high workload due to labour constraints. While the sector has plenty of work on hand, it has remained in the same spot as last year due to a lack of labours.

Also, steel demand in machinery is likely to fall due to weak construction machinery sales, even with high production levels. Furthermore, the automotive sector anticipates renewed growth in FY'24 by tackling its order backlog.

Export demand

Export demand is expected to remain subdued due to concerns about a global economic slowdown.

Domestic crude steel production in FY'23 is expected to be lower than 87.84 million tonnes in FY'22.

Outlook

Japan's steel demand in FY'24 is uncertain. While some sectors like automotive might show growth, whereas, construction and export are likely to remain subdued. The net outcome will depend on various factors, including the global economic situation, government policies, and raw material prices.

Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.